BOLT is a different kind of seed venture capital firm built to serve the needs of early-stage startups at the intersection of hardware and software.
In the past decade, the cost of entrepreneurial experimentation has dropped dramatically, particularly in web and mobile applications. Teams can generate and test hypotheses quickly and efficiently. What used to take millions of dollars and years can now be accomplished with thousands of dollars and in a matter of months. As a result, the rate of exploration has exploded. The drop in the cost of creating and testing such ventures has resulted in the formation of new kinds of venture investment firms. A prominent example is the accelerator or incubator. These firms evaluate hundreds of proposals, choose a small number of teams, and then provide help, mentorship, a little capital, and access to networks in return for a share of the equity.
More recently, there have been a number of parallel changes in the world of hardware-based ventures. Important factors include:
• low cost but powerful design and simulation software
• versatile, inexpensive 3D printing technology
• access to high quality, low cost manufacturing capabilities in places like China
Almost every hardware venture incorporates software and data capture, transmission, and interpretation, all of which benefit from the trends described earlier. Unlike pure software ventures, companies that have important hardware components need access to expensive and complicated machinery, ranging from lathes to printed circuit board prototyping equipment. These companies also need expertise in operating this equipment and transitioning from prototypes to final products.
Ben Einstein, Axel Bichara, and Scott Miller, the founders of BOLT, recognized this trend and created a seed venture firm focused on the unique needs of these ventures and entrepreneurs. BOLT has all the elements required to design, develop, prototype, test, and make ready for manufacture novel combinations of hardware and software. They have equipment, skilled staff, and access to experienced mentors and networks that can help ventures accomplish more in less time and with less money than would otherwise be possible. They provide a place and process to help create the next generation of independent hardware companies. In addition, they provide financial and investment advice and coaching to their portfolio company management teams.
Einstein was a product design and development guru, Bichara was an entrepreneur-turned-venture capitalist and Miller was an expert in engineering and manufacturing. They closed on a $4 million fund in early 2013 and opened a space in downtown Boston that contained a remarkable array of equipment and talent to attract and nurture high potential ventures.
This multimedia case offers insights into the BOLT team, the facilities, the process and a few of the ventures that chose to work with BOLT. It also provides insights into the evolving world of entrepreneurship and venture capital. The case focuses on the founders’ decision to raise a second fund and expand to a second location.